Manufacturing growth slows: HSBC

By Crystal Hsu / Staff reporter

Taiwan’s manufacturing conditions improved further last month, though slowing from a 33-month high the month before, as the pace of expansions in output and new work softened, HSBC Holdings PLC said in a recent report.

The HSBC Purchasing Managers’ Index (PMI) was 52.7 last month, down from 54.7 one month earlier, boding well for local manufacturers, despite the slower pace, the British banking group said.

“New orders are still growing and there have not been signs of excessive stock-building, which should keep output growth positive, albeit at a weaker pace,” HSBC economist on Asia John Zhu (朱日平) said in the report.

The PMI reading aims to gauge the health of the manufacturing sector, with a score above 50 indicating expansion and a value below the threshold suggesting contraction.

The HSBC score is significantly lower than the of 60.6 on the Chung-Hua Institution for Economic Research’s (中華經濟研究院) index, as Zhu observed Taiwan’s growth momentum has slowed after the Lunar New Year.

Although the survey is still pointing to overall expansion, much will depend on how external demand evolves in the coming months, the economist said.

Major economic barometers show a weak recovery thus far, with the first quarter likely slipping into technical recession from the preceding quarter.